Intangibles and Transfer Pricing: Minimizing Valuation Risks

Valuating intangible properties, such as patents and trademarks, is among every company's top priorities as it is the basis of transfer pricing and many business and commercial transactions. However, many companies still struggle with the complexities of documenting and defending their intangibles positions. Erroneous valuation and analysis could incur various dilemmas significantly impacting business assets, including tax positions relating to intangibles or simply complex intercompany transactions. To mitigate these risks, it is essential for businesses to ensure an intricate yet doable strategic approach that would entail consistency in the processing and reporting of data to help them arrive at a more realistic and accurate intangible property valuation, especially with regard to new OECD transfer pricing approaches toward intangibles.

In this Webcast, a notable panel of distinguished leaders and intellectual property (IP) professionals brought together by The Knowledge Group will provide and present an in-depth analysis of the fundamentals as well as recent valuation methodologies. Speakers will also share best practices in calculating damages in IP valuation.

Definition of hard-to-value intangibles (HTVI): The term hard-to-value intangibles (HTVI) covers intangibles or rights in intangibles for which, at the time of their transfer between associated enterprises, (i) no reliable comparables exist, and (ii) at the time the transactions was entered into, the projections of future cash flows or income expected to be derived from the transferred intangible, or the assumptions used in valuing the intangible are highly uncertain, making it difficult to predict the level of ultimate success of the intangible at the time of the transfer, Actions 8-10: BEPS Final Reports, ¶6.189

BEPS considerations

Clear definitions of intangibles

Allocation of profits to intangibles in accordance with value creation

Transfer pricing rules for transfer of HTVI

Implications for methods

Ex post and ex ante considerations

Comparables

Exemptions

Learnings from recent IRS transfer pricing disputes

Amazon (transfer of customer lists and other IP)

Medtronic (appeal of 2015 decision)

Coca Cola

Gene TienDirector of EconomicsBaker & McKenzie Consulting LLC

Dr. Tien specializes in transfer pricing and applied economics with an emphasis on issues relating to intangibles and licensing. His practice is technology and IP-based with a practical eye toward managing global transfer pricing. Before joining Baker McKenzie, Dr. Tien was an economist at PwC where he helped taxpayers develop their multinational pricing policies and resolve U.S. and non-U.S. audits.

Dr. Alan G. White, Ph.D.Managing PrincipalAnalysis Group

Dr. White specializes in health care, transfer pricing and valuation, health economics and outcomes research (HEOR), and commercial damages. He combines his expertise in applied microeconomics, statistics, and econometrics with nearly 20 years of experience in industry-specific client engagements.

A diverse range of clients have retained Dr. White to assist in all stages of the litigation cycle – from advising on discovery issues to testifying at trial. He has worked on general commercial business litigation matters such as allegations of false advertising and breach of contract, investigations into alleged off-label promotion of prescription drugs, and the economic impact of generic entry/substitution. He has also analyzed economic issues relevant to class certification and quantification of damages. Dr. White has managed numerous commercial litigation matters, supporting academic and industry specialists with expertise in industrial organization, statistics, health economics, and marketing. His tax and transfer pricing work has evaluated the arm’s length nature of pricing in intercompany transactions, and the estimation of useful economic lives for various tangible and intangible assets.

In addition to his litigation work, Dr. White has worked on the development of empirical models for determining factors that may help identify patients at risk of prescription opioid abuse, as well as the estimation of societal economic costs of prescription opioid abuse. His research and numerous publications have focused on specific health economics issues, including the costs of abuse and the evaluation of the impact of various FDA-approved abuse-deterrent opioids. He has presented at, and participated in, a number of panel discussions at industry conferences.

Dr. White also serves as an adjunct faculty member in the Northeastern University’s Department of Economics, where he teaches courses on applied microeconomics and applied econometrics.

Course Level: Intermediate

Advance Preparation: Print and review course materials

Method Of Presentation: On-demand Webcast

Prerequisite: General knowledge of IP valuation

Course Code: 147449

NY Category of CLE Credit: Areas of Professional Practice

Total Credit: 1.0 CLE

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About the Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

About the Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

Baker McKenzie has provided sophisticated legal advice and services to many of the world's most dynamic and global organizations since our founding in 1949. With a network of more than 4,200+ locally qualified, internationally experienced lawyers in 77 offices worldwide and 47 countries, Baker McKenzie has the knowledge and resources to deliver the broad scope of quality legal services required to respond effectively to international and local needs -- consistently, confidently, and with sensitivity for cultural, social, and legal practice differences.

Baker McKenzie’s 10,000+ lawyers, supporting professionals, and staff are citizens of more than 60 countries. Baker McKenzie’s professionals are admitted to practice in nearly 250 jurisdictions and have been educated at more than 1,200 institutions, including nearly all of the world's leading law schools.

Founded in 1981, Analysis Group is one of the largest economics consulting firms, with more than 850 professionals across 14 offices in North America, Europe, and Asia. An important differentiator for our clients – including top law firms, Fortune Global 500 companies, and government agencies – is our ability to combine a strong team of advanced-degree professionals with highly credentialed affiliated experts from academia, government, and industry. Together, we provide expertise across a wide range of practice areas, such as antitrust, intellectual property, transfer pricing, general commercial litigation, and strategy. Additionally, we have worked on a number of high-profile litigations. We are able to provide assistance in all stages of the litigation process, including preparation of expert reports, assistance with rebutting other experts, pre-trial discovery, and deposition and trial preparation. Analysis Group is ranked as one of the top economics firms in the world by the Global Competition Review. We have also appeared in the Boston Globe's "Top Places to Work” in Massachusetts rankings for the past ten years, and have been named to the annual Top 100 Women-Led Businesses in Massachusetts list by the Boston Globe Magazine and Commonwealth Institute for the past five years.